On farm non-agricultural activities: Recent evolution and dynamics in Portugal

An increasing share of farmer's revenues derives from on-farm non-agricultural activities (OFNAA), which constitute a complement to the farmers' income and can function as a factor for the development of farms, enhancing the endogenous resources of the territories and contributing to the multifunctionality of rural areas. Therefore, it is relevant to understand the importance of these non-agricultural activities in the territory, their diversification, spatial trends at local level and the relation with farms' orientation. This paper intends to analyse the OFNAA, using as object of study the Portuguese municipalities. To analyse the diversification of the OFNAA, a diversification index based on entropy is proposed. The relationships between OFNAA diversification and the farms'technical-economic orientation (TEO) are also analysed using correlation matrixes, while the spatial patterns are studied, using the global Moran I and local Moran-LISA. The results provide important insights of the OFNAA dynamics and diversification. Therefore, this study provides an important tool for policy management and implementation.